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TMI Blog2023 (12) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... department is left with no option but to issue the show cause notice on the basis of available facts and record with them. This Tribunal has time and again observed that the officers have ample powers under the statute to make effective enquiry and investigation. In M/S. SHUBHAM ELECTRICALS VERSUS CST ST, ROHTAK [ 2015 (6) TMI 786 - CESTAT NEW DELHI] , the Tribunal quashed the show cause notice for the simple reason that relevant facts have not been stated while issuing the show cause notice. Similar are the observations by the Ahmedabad Bench of the Tribunal in INDO NIPPON CHEMICALS CO. LTD. VERSUS CCE, VADODARA [ 2009 (4) TMI 140 - CESTAT AHMEDABAD ], observing that law gives sufficient powers to officers to conduct enquiries and investigations to bring out the truth, and without making any efforts, on the basis of non-production of documents, on the basis of assumptions and presumptions, a case cannot be made out against the appellant which is the case here. The department cannot take shelter on account of failure of the appellant to produce and supply the documents, and it was incumbent upon them to have ascertained the actual nature of the services for the purpose of levying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial construction services as per section 65 (105) (zzq) defined as per section 65 (25b) and Works Contract Services as per section 65 (105) (zzzza) of the Act nor are they chargeable to service tax under Supply of Tangible Goods Use of Goods . Consequently, neither the extended period of limitation is invocable nor the penalty and interest is leviable under the Finance Act. Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be demanded and recovered from them under Section 136 read with Section 140 of the Finance Act, 2007. (v) Interest under the provision of Section 75 of the said Act should not be demanded and recovered from them. (vi) Penalty under Section 76 of the Finance Act, 1994 should not be imposed upon them for failure to pay the service tax in accordance with the provision of Section 68 read with Rule 6 of Service Tax Rules, 1994. (vii) Penalty under Section 77(1) (a) of the Finance Act, 1994 should not be imposed upon them for contravention of Section 69 of the said Act by way of not getting registered under service tax on time as prescribed under the said Act. (viii) Penalty under Section 77(2) of the Finance Act, 1994 should not be imposed upon them for contravention of Section 70 of the said Act by way of not filing the periodical ST-3 return in proper manner for the relevant period. (ix) Penalty under Section 78 of the Finance Act, 1994 should not be imposed upon them for deliberately suppressing of the facts with the intention to evade payment of service tax. 4. As per the charges in the show cause notice, the services rendered by the appellant to M/s L&T Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note of the fact that the appellant failed to submit the substantial documents before the Department, so as to enable the demand under proper head, the same is sustainable and recoverable under Section 73, invoking the extended period of five years. Consequently, the appellant was held liable to pay service tax amounting to Rs. 2,04,88,240/- alongwith interest under Section 75 of the Finance Act read with Rule 14 of the Cenvat Credit Rules and penalty under Section 77(1)(a) and 77(2) and also penalty of equal amount under Section 78 of the Act. Being aggrieved, the appellant has filed the present appeal before this Tribunal. 7. The preliminary objection taken by the appellant is that the show cause notice is vague and the impugned order is beyond the scope of the show cause notice and hence the proceedings needs to be dropped. He has referred to series of decisions on this ground. He has also challenged that the invocation of Section 72(a) of the Act is not tenable. On merits, learned Counsel for the appellant submitted that hiring of Transit Mixer is covered under 'right to use' and not under the service of 'Supply of Tangible Goods' and sale of RMC is not liable to service tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof are vague and there is no clarity on the actual activity carried out by the appellant. The show cause notice is completely silent on the nature of respective activities so as to fall under any specific 'service' as defined under the Finance Act. The authorities while issuing the show cause notice merely proceeded on the footing that the appellant has not submitted the relevant figures and therefore the department is left with no option but to issue the show cause notice on the basis of available facts and record with them. This Tribunal has time and again observed that the officers have ample powers under the statute to make effective enquiry and investigation. In Shubham Electricals vs. Commissioner of C. EX. and ST, Rohtak, 2015 (40) STR, 1034, the Tribunal quashed the show cause notice for the simple reason that relevant facts have not been stated while issuing the show cause notice, the relevant para reads as: "13. We have noticed earlier that the show cause notice itself adverts to the fact that the appellant had provided copies of 20 work orders executed in relation to CWG Projects, particulars of which are set out in a tabular form in para 5 of the show cause notice. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 755* Supply of tangible goods for use on which VAT/Sales Tax has been paid. Effective Control and Possession was transferred to the client. *Amounts are inclusive of VAT/Sales-Tax." Subsequently, along with letter dated 15.10.2012, the appellant submitted Form ST-2 dated 15.7.2010, whereby they were registered under the taxable services, i.e., "supply of tangible goods for use service" and also placed on record the turnover details of L&T during the period 2007-08 to 2011-12 separately for each of the activities. Therefore, when the show cause notice was issued by the department on 23.10.2012, the department was aware of the nature of the services which the appellant was rendering to M/s L & T. However, the department while issuing the show cause notice did not even made any efforts to make out a case of applicability of services of "supply of tangible goods " as inserted by Notification No. 18 of 2008 dated 10.5.2008 and clarified at its inception by the Circular dated 29.2.2008. The definition of "Supply of tangible goods for use service" has been defined in section 65 (105)(zzzzj) and the twin conditions for its applicability have been considered by the Bombay High Court in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the appellant provided 'infrastructure support services' to the appellant. However, the show cause notice alleged that the appellant was provided 'operational and administrative assistance' with supplier. The Commissioner could not have gone beyond the scope of the show cause notice to confirm the demand. This apart, in view of the decision of the Supreme Court in Faqir Chand Gulati and the decision of the Tribunal in Mormugao Port Trust, no service tax can be levied on the appellant under BSS." The above decision has been affirmed by the Apex Court observing that the view taken by Tribunal is absolutely correct view, reported in 2022 (61) GSTL 342. 15. On merits, the first activity pertains to supply of Transit Mixers on hire by the appellant to M/s L&T. We agree with the submissions of the learned counsel for the appellant that the services rendered by them cannot be classified under the activity of Construction just because the main Contractor M/s L&T was engaged in providing the construction services. Reliance placed by the appellant on the Circular No. 147/16/2011 dated 21.10.2011 is rightly applicable, as it clarified that just because the main contractor is providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the State VAT Acts or Central Sales Tax Act provided five attributes for a transaction to constitute a transfer of right to use goods and quoted para 91 of the Apex Court decision as under : "91. To constitute a transaction for the transfer of the right to use the goods, the transaction must have the following attributes: (a) There must be goods available for delivery; (b) There must be consensus ad idem as to the identity of the goods; (c) The transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permission or licenses required therefore should be available to the transferee; (d) For the period during which the transferee has such legal right, it has to be the exclusion of the transferor this is the necessary concomitant of the plain language of the statute -viz, a 'transfer of the right to use' and not merely a license to use the goods; (e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others." (Emphasis supplied) 17.1. Also distinguishing the decision of the Andhra Pradesh, High Court in Rashtriya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also held that maybe the appellant is providing operators to the customer, but these operators were working entirely under the direction and control of the customers and the appellant had no control over them and therefore providing of operators who are actually under the direction or control of the customers would not mean that the transaction was not that of sale. 18.2 In addition to the clauses referred by the Commissioner, we would like to take note of other terms and conditions in the agreement which is evident of the fact that the appellant did not have any direct or indirect control on the transit mixers once they are provided on hire to M/s L & T. Clause (4) of the agreement specifies that the transit mixers are provided throughout the duration of the contract on payment of fixed charges per month up to 260 hours in a month and thereafter at the rate of 70% of the normal hire charges per hour at actual for exclusive use by L&T. Further, the usage of machinery depended on the client, as in case of 'nil' use also, the client was supposed to pay the fixed rental. The transit mixer provided to M/s L&T was exclusively for the use of L&T only in their business. The drivers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, "I may clarify that there is no intention to levy service tax on truck owners or truck operators", the learned counsel for the appellant submitted that service tax is levied on the activity of transport agency or concerns or transport companies who provide facility for the transportation of goods and issue consignment note but when a producer or manufacturer provides the services for transportation of goods by his own transport and does not issue any consignment note, the same is not covered under the service of Goods Transport Agency (GTA), as defined under section 65 (50b) of the Act. The legal provisions of section 65 (105) (zzp) and section 65(50b) of the Act are as follows: "Section 65 (105) (zzp) "Taxable Service" means any service provided or to be provided to any person, by a goods, transport agency, in relation to transport of goods by road in a goods carriage. Section 65(50b). "Goods, transport agency to mean any person who provides service in relation to transport of goods by road and issues. Consignment note, by whatever name called." The scope of liability of service tax in the category of Goods Transport Agency has been considered by the Tribunal in Laxmi Nara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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